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Semiconductor stocks: top performing to watch for 2024

Semiconductor stocks: A computer chip emitting a green light, symbolizing semiconductor stocks.

As we enter a new year, the question on everyone's mind is what stocks will be the best to watch in 2024? One sector that has been attracting a lot of attention lately is semiconductor stocks. These companies have been performing exceptionally well in 2023, and thus are named as the top companies, and many analysts predict that they will continue to do so in the coming year.

Why? Well, many of these companies have benefited from an increase in demand for semiconductors due to the rise of new technologies such as 5G and AI. Also, the global shortage of chips has led to higher prices, resulting in increased gains for semiconductor manufacturers.

So, what are semiconductor stocks?

First let's start with what a semiconductor is. A semiconductor is a material that conducts electrical power on its surface and is essential in the manufacturing of electronic devices. These devices include microchips, sensors, and circuits that control various electrical signals. Semiconductors are used on a broad range of products like computers, smartphones, medical instruments, and defence technology.

The demand for semiconductors has risen with the growth of technological advances like Internet of Things (IoT), 5G, Artificial Intelligence, and autonomous vehicles. Semiconductor stocks are stocks of companies that specialise in the design, manufacture, and distribution of semiconductor devices and components.

These stocks represent companies involved in the production of integrated circuits, microchips, processors, and other electronic components used in various industries, including technology, telecommunications, automotive, healthcare, and more. Semiconductor stocks are influenced by factors such as industry trends, technological advancements, supply and demand dynamics, and overall market conditions.

5 of the semiconductor stocks to watch in 2024

  1. Advanced Micro Devices (AMD.US). Advanced Micro Devices designs and manufactures microprocessors, graphics processors, and other computer-related technologies. As of November 17, 2023, its market cap is $193.59 billion. AMD has had a stellar year in 2023, with its stock price increasing by almost 87.18% year to date. With its strong position in the gaming and data centre markets, we expect AMD to continue to perform well in the upcoming year. As the demand for high-quality gaming and data processing increases, the company is poised to benefit from these trends.
  2. NVIDIA Corporation (NVDA.US). NVIDIA is a technology company that designs graphics processing units (GPUs) for gaming, automotive use, and other industries. As of November 17, 2023, its market cap is $1.22 trillion. NVIDIA's stock price has increased by 245.65% year to date, mainly due to the growth of the gaming and artificial intelligence markets. We expect NVIDIA to continue to do well in the upcoming year, as it continues to innovate and improve its products across multiple sectors.
  3. Taiwan Semiconductor Manufacturing Company (TSM.US). TSM is a leading semiconductor foundry that manufactures and designs semiconductors for various industries. As of November 17, 2023, its market cap is $475.32 billion. The company has had a great 2023, with its stock price increasing by 28.04% year to date. The growth of cloud computing, mobile devices, and gaming has driven the demand for its chips. With the international chip shortage, the company is poised to continue benefiting from the increasing demand for semiconductors in 2024.
  4. Intel Corporation (INTC.US). Intel designs and manufactures microprocessors and other computer-related technologies. As of November 17, 2023, its market cap is $182.76 billion. While the company has lost market share to competitors AMD and NVIDIA in recent years, 2023 was a good year for Intel. Their stock price has increased by 62.18% year to date as they began to make moves towards chip innovation and their new line of data centre processors. We expect Intel to continue to improve and innovate in 2024, making it another semiconductor stock worth watching.
  5. Micron Technology Inc. (MU.US). Micron manufactures and markets memory and storage technologies. As of November 17, 2023, its market cap is $84.19 billion. Their stock price has increased by 52.21% year to date. We expect the company to improve in 2024. With the increasing demand for semiconductors and memory technologies, we believe Micron is poised to benefit from these trends as the year progresses.

Why are semiconductor stocks important for traders?

Semiconductor stocks continue to be important for traders as we head into 2024 due to several factors.

  • Firstly, the semiconductor industry remains at the forefront of technological advancement, with emerging technologies like AI, IoT, and 5G driving the demand for semiconductors. Traders could capitalize on this growth potential.
  • Secondly, semiconductor stocks offer volatility, providing trading opportunities through price fluctuations. Additionally, global economic factors and supply chain disruptions impact the stocks, making them a valuable indicator of broader market trends.
  • Lastly, the importance of semiconductors in various sectors ensures their continued influence and relevance for traders in the coming year.

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What are semiconductor stocks?

These are shares of publicly traded companies that are involved in the design, manufacturing, and distribution of semiconductors. These companies produce the integrated circuits and chips that power various electronic devices.

Why should I consider investing in semiconductor stocks?

Investing in semiconductor stocks could be attractive for several reasons. The demand for semiconductors is driven by technological advancements such as AI, IoT, and 5G, which are expected to continue growing.
Additionally, semiconductors play a crucial role in various industries, including automotive, healthcare, and telecommunications, ensuring a wide range of potential customers and revenue streams.

What are the risks associated with investing in semiconductor stocks?

Like any investment, semiconductor stocks come with their own set of risks. Some common risks include cyclical market trends, competition, regulatory challenges, and supply chain disruptions. Additionally, the industry's high research and development costs, coupled with rapid technological advancements, could lead to significant volatility in stock prices.

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Not investment advice. Past performance does not guarantee or predict future performance.